Pezesha (name comes from various acronyms of Pesa and Wezesha to mean Financial Empowerment in Swahili). We are all about Kenyans empowering other fellow Kenyans by lending money to borrowers that may otherwise not have access to aﬀordable and fair terms. You as a Kenyan or your Chama can also invest with us and earn high returns of up to 5% per month by lending to another responsible low income borrower over your mobile phone.

2. What makes Pezesha different from other alternative and retail lenders?

Risk Minimization: Pezesha has deployed a robust credit scoring model, capable of processing conventional and unconventional data in order to identify credible low income borrowers. The ability to identify these credible borrowers who typically do not have any collateral helps to minimize the risk that lenders on our platform stand to face.

Maximization of Returns: Pezesha is structured in a way whereby the lenders receive their full income without incurring any operating costs which are involved in facilitating the loans. This is achievable because Pezesha uses a peer to peer structure thereby ensuring that lenders get maximum returns which Pezesha deals with the basic expenses.

3. What are the benefits of being a lender on Pezesha?

Earn solid returns of 14%-50% per year compounded Annual Rate compared to fixed deposits in banks and micro lending savings options of 3-7% per year.

Ability to choose your portfolio structure

Low investment volatility. A lender could earn an annual return within the range of 24% to 34% per annum.

Membership in Pezesha investment club to access strategic networking events and other lucrative investment opportunities

Be part of creating social and economic impact

4. Give an example of how Pezesha works

Mary needs Ksh. 5,000 ($50) to buy weekly stock for her small kiosk in a low income neighbourhood in Nairobi. She does not have the cash available to buy her products and therefore has to temporarily close, despite knowing she would have Ksh. 10,000 in a month’s time from her revenues.

Through our mobile platform, Mary requests a loan from Pezesha, who conduct an automated credit score in 30 seconds through robust verified data sources, and then sources the amount from Kenyans with idle/spare capital.

Mary can then grow her business, and improve her credit rating, paying back with mobile money.

You can then choose to be either a Bronze Lender or a Silver Lender. A Silver lender lends by yourself managing portfolio through mobile app. For a bronze lender Pezesha manages portfolio on your behalf.

6. Who is a Silver Lender(Preferred Option) ?

Lend directly through the platform by downloading our app by the name Pezesha from the App store. The following Terms & Conditions (T&Cs) abide https://goo.gl/mLnuae. If you have any questions about it please contact us directly.

Pros

Full control of your account i.e.you can directly do top ups through M-pesa, withdrawals, recycling of funds etc

Membership in Pezesha investment club to access strategic networking events and other lucrative investment opportunities

Chances of generating higher returns of up to 50% per year from re-lending through accumulating interest

Freedom to choose and manage your portfolio based on your risk appetite

KYC process is shorter as all you need is to download the app, register your accurate details, accept our T&Cs and start lending

Cons

You are not guaranteed of the return, meaning you could lose up to an average of 5%-10% of your entire portolfio investment

For now, one can only lend as an individual and not as a group/investment club.

Maximum top up of Kshs 140,000 through M-pesa

7. Who is a Bronze Lender?

Pezesha lends on your behalf. In this case, you/your investment club do not want to be caught in the hustle of registration or managing your portfolio as it continues to grow. The T&Cs are provided upon request through our email: lenders@pezesha.com

Pros

We lend through our Pezesha Fund and guarantee you an interest of 1.3% per month that translates to 18% per year which is still higher than banks currently at 12%-14% per year. And M-shwari at 7%-11% per year.

Membership in Pezesha investment club to access strategic networking events and other lucrative investment opportunities

Interest payable every end month and you can choose to compound and roll over to double your guaranteed returns

KYC process is longer due to additional information and checks that are required in accordance to law and business processes.

Cons

You can only view the performance of your portfolio through monthly reports but Pezesha gets to have full autonomy of the portfolio management and risk diversification

Funds are locked for a minimum period of 1 year and in the case the funds are withdrawn sooner the lender pays a penalty fee of 30% of the total interest earned.

8. How do I top up and withdraw funds on the Pezesha platform?

Pezesha works by lenders topping up to a mobile wallet that is used to fund local Kenyan businesses.Top up is done either through M-Pesa Paybill or directly from the app as follows;

Option 2-Go to the top-up tab then enter the amount to credit, once you click on top-up, an MPESA request pop-up will appear on your screen, then proceed to Answer with 0, to create a PIN for your transaction. Then top-up the amount preferred from your M-pesa.

9. What is the minimum and maximum amount I can deposit?

Kshs 3,000 is the minimum investment top up. One can top up as low as Kshs 5,000 and M-pesa allows a maximum top up of Kshs 140,000/- (USD 1,400) per day.

10. Will you always be taking in new lenders?

No, when we have more supply of lenders than we require, we reserve the right to stop the acceptance of new lenders into our platform for a period of time. We will also notify lenders when necessary.

11. What is the repayment process?

When a borrower repays their loan, a credit will be made on your Pezesha account, which you can further use to fund other Kenyan businesses within the Pezesha platform, or withdraw from your account.

We encourage you to recycle your repaid amounts instead of withdrawing the funds as the compounding effect will maximize your returns.

Please note that there is a Ksh. 33 withdrawal fees.

12. What kind of returns could I make?

Pezesha is currently working with 4 types of 30 day loan products. These are:

(a) a Ksh. 1,000 loan from which you can earn a fee (return/revenue) of Ksh. 75 or 7.5% in 30 days (on top of the amount you lend) if the loan is fully repaid;

(b) a Ksh. 3,000 loan from which you can earn a fee (return/revenue) of Ksh. 150 or 5% in 30 days (on top of the amount you lend) if the loan is fully repaid;

(c) a Ksh 5,000 loan from which you can earn a fee (return/revenue) of Ksh. 200 or 4% in 30 days (on top of the amount you lend) if the loan is fully repaid;

(d) a Ksh 10,000 loan from which you can earn a fee (return/revenue) of Ksh. 325 or 3.25% in 30 days (on top of the amount you lend) if the loan is fully repaid;

13. What are the risks involved?

Please note, lenders bear the full risk if a loan is not repaid, fully or partially. Pezesha is not lending your money, you are. That said, it is our job at Pezesha to make sure that we stringently assess all borrowers before they are eligible for loans, this ensures repayment, which in turn ensures stable investor returns. We advocate for a prudent risk policy that involves:

Pre-screening: Before on-boarding a borrower, we conduct thorough checks to determine their capacity to pay. Using our credit-scoring model, we establish the borrower’s credit score and reference third party information from Credit Reference Bureaus.

Please read our Lender Terms & Conditions before signing up as a lender. If you have any questions about it please contact us directly.

14. How do you assess whether a borrower is creditworthy or not?

Pezesha uses a number of ways to ensure that our borrowers are likely to repay their loans. This creditworthiness evaluation is done in real time.

TransUnion/ CRB to know in seconds whether a borrower has failed to repay loans to any other Kenyan financial institutions in the past

Verified and robust data that we access directly from mobile operators’ APIs with their consent (for example, their mobile money statements) to get a very detailed view of their incomings and outgoings, which in turn allows us to understand whether a borrower has the financial capacity to repay your loan

Strategic partners/trustees also provide us with 12 months consistent stock and automated business transactions of the micro business they work with

15. How do you ensure consumer protection?

Consumer protection is at the heart of our business for both our borrowers and lenders. With the expertise of our legal arm, we have been able to set clear terms and conditions for our customers including complying with the best international practices over and above that which is required by Kenyan law. We take a collaborative approach in educating our customers on our terms of use and ensuring good user experience in presenting and communicating the terms on our platform.

Our customer KYC process is thorough with checks and balances including checking with third parties credit databases for any fraud or illegal track record. We do this in a number of ways:

1.Education

We understand that the character of a borrower is a key factor in whether the borrower will meet his/her loan obligation. To this end, we spend considerable time in educating the borrower as a means of positively influencing the borrower’s character.

Therefore, our loan process starts with educating and creating self-financial awareness to the low income borrowers. This is followed by a clear explanation of the terms and conditions of the loan and how the ability of the borrower to diligently abide by the terms such as timely repayments, helps to improve their credit history performance to ultimately connect them to becoming part of the formal financial system.

Additionally, this education helps us to build a loyal relationship with our customers and understand their needs better. The credit we facilitate is built on responsible financing - transparency and trust to the lenders by giving them sufficient information about the borrowers’ risk profiles and use of funds.

We have closely followed guidelines by FSD Kenya on to how to ensure high levels of consumer protection in what we do.

Importantly, time is taken to explain what the Credit Reference Bureau (CRB) is, and to introduce them to the concept and consequences of “blacklisting”.

We explain the Terms & Conditions in a language conversant to the borrowers, and also advise the borrowers on how to contact Pezesha directly with any enquiries/ uncertainties.

In summary, we ensure that the borrowers understand the terms of the loan agreement before proceeding to the loan application process. This includes understanding:

the foreseeability of harm or consequences including blacklisting if they fail to repay the loan on time;

the use of the loan in line with moral and ethical principles

the extent of the burden and consequences if the other members in their group or community do not pay back on time.

the cost, availability and risks involved.

Borrower profiling

Importantly, our goal is to be sustainable in the long term, and we know that this will only be possible by ensuring that most of our borrowers have the capacity to pay back the micro loans they are given.

Our profiling helps us to understand the borrowers better and as such, we take guardianship seriously, and are careful not to overextend the amount of credit to an individual until the borrower has proven that they have the ability to generate the necessary payments and thus not fall into a debt trap.

This is governed by our duty of care that involves the signing of a legally binding contract and a digital consent acceptance form on our terms with each borrower.

16. What is Pezesha’s default rate?

Our credit scoring continues to evolve to ensure its robust enough to further intelligently assess creditworthy borrowers and automatically reject the ones below the threshold. This will significantly reduce default risk and increase returns for lenders.

Our credit scoring model helps us to identify borrowers at risk of overextending their debt by spotting irregular patterns in the data obtained from the borrowers. This is done through some complex data analytics which has taken into context the Kenyan financial environment, and this is a core tenant of our credit scoring model.

Our team has built successful credit scoring models in Africa before. Our exceptionally talented tech team has built the scoring system to scale with our growth and allow us to closely monitor the performance of our loans. This allows us to better assess our new borrowers in order to tailor our offering to them, and allow lenders to choose a risk portfolio which best suits them.

17. Does Pezesha Invest its own Funds?

Yes. Pezesha investments covers 20% to 40% of the total loans granted on our platform. Our investment strengthens our “skin in the game” in understanding and learning from our own data, risksand consumer behaviour, as well as patterns to reduce the risk of bad debts.

Pezesha will continue to invest alongside other lenders on the platform as this also helps us to maximize our returns in the short and long term. We walk the talk: Pezesha invests its own money on the platform to also demonstrate our confidence in our credit scoring modeland also to gauge borrower behavior in terms of repayment and default so as to further enhance our credit scoring model.

18. What do you do to ensure a loan is repaid on time? What do you do if a loan is not repaid on time or past 90 days?

We have implemented an effective recovery policy: We make the best effort to recover lenders’ investment.

We send frequent SMS reminders and calls to borrowers ontheir loan repayment schedule - from day 1 to day 30. Ifthey are late, we send them automated follow up SMS reminders. Furthermore, we work closely with community champions to assist in the collection process. We then do a follow up call and SMS in the event a borrower defaults on their repayment.

Thereafter, Pezesha forwards their names and details to a credit reference bureau, TransUnion, that doubles up as our external debt collection agency for blacklisting after day 90.

We ensure the external collection agency practices align with our values, approach and reporting policies through our monthly reviews and weekly communication and reporting. This is achieved through brainstorming cost effective and fair sanctions that include but not limited to giving the borrowers choices of restructuring their debt while ensuring that they are not incentivized to restructure when they could otherwise repay on time. After day 120, we then write off the loan.

In the event that a repayment goes past its term, the borrower incurs daily charges to encourage them to quickly settle their balance. The penalty interest will be included in the investor’s return.

19. Can I withdraw money from a loan that I have made before it has been repaid?

When funds are committed to a loan that has been disbursed, the money is with the borrower and cannot be reclaimed until it is repaid. When the borrower begins making repayments, these earnings are transferred back to your Pezesha account. Once the funds are in your Pezesha account, you can withdraw the funds at your convenience though we encourage you to re-invest to maximize your long-term returns.

20. What is the difference between Funding Balance and Lending Balance on the app?

The lending balance is the same as your wallet balance and is the amount which is available for withdrawal at any point in time.

However, the funding balance is the amount which can be utilized for granting out loans.Typically, both lending balance and funding balance show the same figure for lenders who loan continuously from both interest earned and principal repaid.

These two balances will only be different if a lender chooses to lend out from only principal repayments. In this case, the funding balance will be lesser than the lending balance.

21. How do I get to know when my borrower has made a repayment?

If you chose the silver option, you can access all your repayment notifications from the app dashboard. The button is on the upper right side of the app. Once you click on the menu bar, a pop-up menu will appear listing Settings, Notifications, and Log Out, click on the Notification button which brings you to another page with your borrowers’ repayments updates at each given time and date.

22. Are there any tax implications for me that I need to be aware of when I lend on Pezesha?

Yes. Returns/Revenues that you earn on Pezesha will be considered part of your taxable income.

23. DISCLAIMER: Deducting Withholding Tax (WHT) for lenders:

As from the month of June 2017, Pezesha started deducting 15% Withholding Tax for all interest earned by lenders on our platform. This includes all interest on penalties accrued from late borrowers. This is a mandatory requirement by law under paragraph 5 of the third schedule of the income Tax Act. Lenders Wallet balance will be less WHT deductions. You can now see all the WHT from your dashboard on the app and when you click on it you will see the fine details of all loans and their deductions accordingly. Kindly note that we will be issuing you the Withholding Tax Certificate end of the year. That said, we are always flexible to issue it upon request by a lender and in the case of a Bronze lender, we issue it on a monthly basis.

24. Who owns Pezesha?

Pezesha is owned and run by other fellow Kenyans who have over 10+ years of experience in the credit and business sector. The Pezesha Team is made up of local individuals and local lenders whose aim is to empower other fellow Kenyans, ensuring equal opportunities and financial inclusion for all Kenyans.

25. I have more questions – does Pezesha have a customer care service?

Yes. Please send us any questions or enquiries that you may have to lenders@pezesha.com and we will respond to you as soon as possible.

1. Benefits of borrowing with Pezesha

Grow and expand your business faster.

Access to business skills and opportunities through our network.

Instant and quick cash

Increase your business competitiveness.

Great living standards for you and your family.

2. What are the criteria for borrowing with Pezesha?

You need to be running a business

You have to be part of a social savings group (Chamaa)

You need to have a valid National ID

You need to have a registered MPESA number at least 6 months old

You need to have a Trustee/referee and a guarantor from your group who will approve your loan

3. What is the process of borrowing a loan from Pezesha?

Proof of belonging to a group/chama with a group leader/agent

The group leader or agent contacts Pezesha and registers the group

Pre-screening and vetting of the group is carried out

Qualification and profiling for loan application

Education is provided to the borrower about our products/services, terms and conditions for loan use

Collection of group and individual information, National ID, business information among other transactions data.

Service charge Fees of Kshs. 150 - This is charged for the loan processing and standard M-Pesa charges for sending money

Facilitation Fees - varies depending on the loan size you took. For a Kshs. 5,000 loan is 8% and for a Kshs. 3,000 loan is 10%

Any other charges like Penalty charges of 10% will only result if you are late in your loan repayment

5. Is the information I provide during the loan application process safe and secure with Pezesha?

Yes. We keep your information safe and confidential. Our Lenders will also not have access to your contact details as we do the collections service on their behalf.

6. Why do you need my M-Pesa statements and business information?

This information is needed for the purposes of only helping us credit score you for a loan with us. If you are not willing to provide this information, then you may not be able to qualify for a loan with us and your loan application will be rejected.

7. How do I make loan repayments?

All your loan repayments are done through M-Pesa by following the instructions below:

Go to sim toolkit

Go to your M-pesa Menu and scroll down to “Lipa Na M-Pesa”.

Select “PayBill”.

Select “Business Number” and enter 898927.

Select “Account Number” and enter your ID Number that you used to register on Pezesha.

Enter the amount you want to repay.

Enter your M-Pesa PIN and send.

You will then get an SMS notification to alert you that you have successfully paid to Pezesha Africa Limited.

NOTE: All repayment SHOULD be done through Pezesha’s paybill and NOT directly to the Agent’s phone number.

8. Can someone else make my loan repayment on my behalf/using their own phone number?

Yes! Someone else may make the loan repayment on your behalf using their own phone number by sending the loan amount due to the Paybill 898927. However, you have to give them your ID number that you used for the loan application and tell them to use that as the Account Number.

9. How often do I need to repay my loan?

We encourage you to repay your loan in weekly installments so that you can earn points to receive a bigger repeat loan with us so as to improve your credit scoring. You also have the flexibility to repay your loan in 30 days but then you limit yourself from the faster and quicker loan and growth of your business so it's advisable you pay before the 30 days.

10. Will Pezesha remind me about my loan repayments before its due date?

Yes, the moment we disburse your loan amount to your phone, you will receive the first SMS from us detailing your repayment schedule. In addition, we will be sending you bi-weekly reminders via SMS notifications. We however advise you to also keep your own record of when you are supposed to make your repayments to avoid late payments and penalties.

11. When I repay my first loan on time, how do I get another loan?

You qualify for a repeat (second) loan once you have fully cleared your first loan repayments on time. You will also earn points that will qualify you for a loan increment as well as improved credit scoring that will attract more lenders to fund your loan faster on the marketplace.

We will give you SMS instructions on how to apply for a second loan. It's an easy and straightforward process that will take you less than 5 minutes. Please contact us through 0738 291 605 OR 0792651189 OR 0798984938 or Email: hello@pezesha.com and we will follow up with you for more details.

12. What happens if I don’t pay my Pezesha loan?

You will be penalized with a 10% fee per month and your chances of getting another loan with us will also be reduced.

If you completely default, we will report and blacklist you on Credit Reference Bureau (CRB), which means, your opportunity to get a loan elsewhere including with M-Shwari, will be impossible. We will also report you to external debt collectors who will be aggressive and come to your location to take an equivalent asset (s) to cover and pay for your loan.

13. As a borrower or our Chama can I also be a lender?

Yes! As a borrower or as your Chama you can also be a lender in the near future by investing with us to generate compelling returns that you can then plough back to your business. Please contact us if you or your Chama would like to be a lender with us and we will take you through the process and give you further information.

14. Why Pezesha and not the other mobile lending platforms in the market?

We provide fair and flexible terms for our loans. And since our focus is primarily on micro businesses, then we give them more than credit but also empower them with a distribution platform and new business and investment opportunities to improve their livelihoods and also living standards.

15. What if I have more questions or need clarifications on Pezesha Loan?

Please do not hesitate to contact us through 0738 291 605 OR 0792651189 OR 0798984938 between 8:00a.m – 5:00p.m from Monday to Friday. You can also send us an e-mail to hello@pezesha.com and we will respond within 24 hours.

1. What are the criteria for becoming a Pezesha Agent?

Proof of a good track record in your residential area/community

Must be part of a Chama or youth leader from a well known youth group in their community

Have or know of an existing network of low income borrowers running micro businesses and leaders like chiefs in your area.

Must have experience working with groups/Chamas or field mobilization

Must have a smartphone

Must have a high level of integrity and transparency in handling borrowers

Must be fluent in Swahili and be able to read and understand English

Hardworking and Friendly

Demonstrable ability to carry out collections

2. What are the benefits of a Pezesha Agent?

Rewarding commissions based on performance on recruitment of quality borrowers and their timely repayments

Financial empowerment and training

Access to working capital if in a business.

3. What is the process of becoming a Pezesha Agent?

Call us or send an SMS to the phone number 0719 113 801 with the word “PEZESHA AGENT” and someone from our team will follow up with you

Pre-screening, vetting and profiling following our set criteria

Education and Training on our products/services as well as our terms and conditions

Following successful completion of the training and a satisfactory outcome, one is qualified and empowered as a Pezesha agent in their location.

4. What are the responsibilities of a Pezesha Agent?

Identifying and vetting quality borrowers running micro businesses in low income communities, preferably where they reside

Educating the borrowers on Pezesha and its loan products

Assist in on boarding and consolidating new quality borrowers through Pezesha application process

Loan collections and following up on borrowers

Assist in collection of additional data sets as required during and post loan application